SME eNewsletters

Lux Research Introduces New Exploration and Production Service

New research service will cover oil and gas. Focus will be on innovations that can unlock new reserves and resources in oil, gas, and mining. Company believes technology will be critical to develop potential from resource reserves.

Lux Research announced on October 1 the launch of its new Exploration and Production business and technology research service. It will cover emerging technologies in upstream oil, gas, and mining – a growing market with strong capital budgets and increased M&A activity, according to Lux.

“Lux Research’s Exploration and Production Intelligence service provides a detailed analysis of trends and innovation in the upstream oil and gas sector,” said Rick Nariani to SME’s Energy eNewsleter. He is the analyst and research leader for the new practice. “We examine the competitive landscape for new and emerging technologies, whether it be related to heavy machinery or smaller parts such as drill bits or rotors. We also look at risks and challenges facing the sector and frame them as opportunities. The industry experience that our analysts have allow Lux Research to better analyze technologies, determine the probabilities of success, and provide recommendations on areas of focus for those looking to enter this dynamic industry.”

The Exploration and Production service will cover advances in oil and gas production that are unlocking previously inaccessible reserves, with monitoring and analysis of technologies ranging from seismic data acquisition, enhanced oil recovery, and advanced materials for drilling.

“In the last 15 years, economically recoverable oil reserves have increased by 25% simply due to breakthroughs in technology,” said Brent Giles, Senior Analyst at Lux Research and leader of the Exploration and Production Intelligence service. “Our future prosperity will depend on disruptive advances in this field – just as the innovation of hydraulic fracturing has given the U.S. economy a shot in the arm with the shale gas boom.”

Lux Research’s initial report in this service is titled “The Race to Replace Reserves.” Among its key findings:

Oil reserves will be depleted much sooner than thought. Global stated recoverable oil reserves, conventional and unconventional, total 1.65 trillion barrels, or 54 years of supply. If adjusting remaining oil reserves for population growth and nominal increases to per capita consumption rates, oil shortages could occur 18 years earlier than that.

OPEC reserves have been overstated. OPEC’s stated reserves skyrocketed from 878 billion barrels to 1.2 trillion barrels throughout the 1980s and 1990s without any new significant discovery. With cumulative oil production of 449 billion, true reserves for OPEC could be as low as 428.94 billion, resulting in global price shocks by 2020.

Technology will be critical to unlocking potential from resource reserves. Resource reserves on American soil, such as the 4.6 trillion barrels of oil shale deposits or the 14 million metric tons of rare earth elements, if proved economical, could eliminate dependence on energy imports. For example, replacement of oil reserves at a rate of 1% annually would fend off any oil shortages and supply a growing population for at least another 90 years.